This page has been archived and commenting is disabled.

Cohen & Steers Funds Merge

Tyler Durden's picture





 

Two odd press releases after the close today, both pertaining to our favorite REIT focused fund. According to the first, Cohen & Steers Advantage Income Realty Fund, Inc. ("RLF"), Cohen & Steers Worldwide Realty Income Fund, Inc. ("RWF"), Cohen and Steers Premium Income Realty Fund, Inc. ("RPF") and Cohen & Steers Quality Income Realty Fund, Inc. ("RQI") have all merged with and into RQI. It apeears that even despite the magical ramp of all REITs this quarter, those pesky "size matters" issues have reared their ugly heads for the 4 various closed-end funds (all four combined represent less than half a billion in net assets):

In approving the mergers, the directors considered, among other things, each fund's investment objectives, net asset value and stock price performance, income-generating strategy and expenses, and potential cost savings based on operational efficiencies. The mergers will permit fund shareholders to pursue substantially similar investment objectives in a larger fund that has similar investment policies and anticipated lower expenses.

Zero Hedge is anxiously waiting to see the proxy information that will accompany this transaction in order to get justification for the move.

And in another almost idential press release C&S announce the merging of its REIT and Utility Income Fund with the Cohen & Steers Select Utility Fund. An interesting tidbit from the PR:

The board also has approved removal of UTF's 20% limit on investing in foreign securities, so that the fund can invest without limit in foreign securities, including securities of companies in emerging market countries, to the extent consistent with the fund's investment objective and other investment policies. The changes will broaden UTF's geographic investment universe and open up potentially higher-growth sub-sectors while maintaining similar investment characteristics.

Nothing like having no size limits in a $1.4 billion fund. Visions of Bill Ackman's PSIV (Target) adventure, and its dramatic returns, start floating. Of course, one needs dry powder for when Merrill strats upgrading and issuing secondaries for the Honduras mall REIT that is 'almost' guaranteed to generate 1000% return once the Honduras SEC pulls all borrow.

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 07/01/2009 - 00:21 | Link to Comment FischerBlack
FischerBlack's picture

In approving the mergers, the directors considered their own substantial holdings in each separate fund and the overall lack of liquidity in the separate shares of each. Among other things, the directors believe the larger fund will trade more vigorously than the separate funds and prevent large sell transactions at the bid from contributing overmuch to intraday volatility. Shareholders will benefit from the larger fund's lower fees as the share price approaches zero.

Wed, 07/01/2009 - 01:08 | Link to Comment FischerBlack
FischerBlack's picture

"pulls all borrow"

I love this blog. Righteous snark, brother. Nothing like it.

*kills me*

Do NOT follow this link or you will be banned from the site!